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Fed keeps benchmark rate at 3.5% to 3.75% amid inflation risks
The FOMC held the target range for a fifth straight meeting, voting 9-3, while citing June CPI weakness and a still-resilient job market.
The Federal Reserve left its benchmark interest rate unchanged at 3.5% to 3.75% for a fifth consecutive meeting, according to HousingWire. The decision came as inflation appeared to cool, with analysts pointing to June CPI data and modest job growth.
June CPI fell 0.4% on a seasonally adjusted basis after a 0.5% rise in May, and the report said gas prices dropped 9.7% following a now-defunct U.S.-Iran peace deal. The U.S. added 57,000 jobs in June, at a pace below expectations over recent months, while unemployment was described as little changed.
The Fed also flagged uncertainty tied to Middle East tensions, with analysts warning that oil price increases could feed into future inflation. The article further noted the Fed’s policy stance through a 9-3 vote, with Cleveland Fed President Beth M. Hammack, Minneapolis Fed President Neel Kashkari, and Dallas Fed President Lorie K. Logan voting for a 25-basis-point increase.
In its statement, the FOMC said it decided to maintain the target range in support of the dual mandate and to continue maintaining ample reserves in the banking system. It characterized economic activity as expanding at a solid pace despite elevated uncertainty, and said inflation remains above its 2% goal in part due to supply shocks, including energy-related price increases.